TWN Info Service on Intellectual Property Issues (Feb23/02)
22 February 2023
Third World Network

South-South Collaboration & Compulsory License Can Benefit Public Health

Third World Network

A senior Malaysian health ministry official has shown the path for addressing major public health challenges such as Hepatitis C which kills thousands of people annually, by  availing the use of compulsory licensing provided by WTO’s TRIPS Agreement and engaging in South-South Collaboration that prioritizes affordable access.  

Hepatitis C (HCV) is an infectious disease caused by the hepatitis C virus that primarily affects the liver. Worse still, it is an asymptomatic disease, a silent killer, that is estimated to affect about  58 million people globally with about 1.5 million new infections occurring every year. In 2019, approximately 290 000 people died from HCV.

Speaking at an event organized on 8 February at the UN Headquarters in Geneva by the Malaysian mission Dr. Noor Hisham Abdullah, Director-General (DG) in the Malaysian government’s health ministry provided a glimpse of the journey his ministry undertook to scale up access to affordable HCV treatment in Malaysia, underscoring the role TRIPS flexibilities and South-South cooperation can play in addressing major public health problems. The event was organized with the support of DNDi (Drugs for Neglected Diseases initiative) and the Third World Network. 

He explained that previously it was difficult to treat HCV patients as Malaysia lacked access to effective affordable therapeutic options, pointing to the high costs of hep C treatment of around  $ 70000 ($40500 for sofosbuvir and $27000 for daclatasvir) which many Malaysians could not afford. 

It is estimated that in Malaysia 453000 patients are infected with HCV, with 2000 new infections every year. 73% of patients were those in productive ages between 26 and 50 years. Sofosbuvir, backbone for treating HCV in combination with other anti-virals, is patented by Gilead in Malaysia, hence affordable generic versions cannot be produced or imported. In the absence of treatment, HCV infection would lead to liver cancers and deaths.  

It is at that juncture of difficult challenges and costly treatment of HCV, he says, they decided to come up with a plan to make available HCV treatment that is affordable and accessible for the patient. . 

Dr. Noor Hisham explained that beginning 2015 they had a series of engagements with the patent holder to obtain reduced prices. When that failed, in August 2017, the Malaysian government decided to issue a compulsory license for government use (also known as government use license – GUL) to import generic sofosbuvir from Egypt.  This led to Gilead, the patent holder announcing on twitter that it would extend voluntary license (VL) to include Malaysia i.e. allow generic manufacturers producing under an existing voluntary license to also supply Malaysia. However Malaysia persisted with its government use license, as both the GUL and VL would create more market competition, resulting in more affordable treatment prices. 

[Compulsory license is a flexibility that WTO Members have under Article 31 of the TRIPS Agreement, that allows a government to override the patents without the consent of the patent holder by allowing third parties to produce or import generic versions of patented products. ]

“Once we had Sofosbuvir, we partnered with DNDi to develop a  new compound Ravidasvir”, Dr. Noor Hisham said,  adding that the Malaysian health ministry started clinical trials and found the response to the new drug better than the existing therapeutics, with around 97% success. The Malaysian health ministry has registered Ravidasvir for use in Malaysia.  

According to Dr. Noor Hisham, that the US government deployed various strong-arm tactics including threatening to place Malaysia in US’ special 301 priority list of countries, but with the support of international and US-based civil society, Malaysia was able to counter those pressures. The Malaysian health ministry stood its ground. Notably such unilateral measures are illegal under WTO rules.   

As a result of its actions, the  cost of HCV treatment has been brought down to below US$ 300. The Malaysian health ministry also crossed another major hurdle by decentralizing the distribution of HCV treatment across all its hospitals instead of providing it centrally in its main hospital in Kuala Lumpur, he said.  The Director General showed evidence of increase in uptake of treatment from 1433 between 2013 and 2016 patients to 11453 patients between 2018 and 2021.  

The Malaysian DG repeatedly stressed on the importance of ‘political will’ adding that “everyone has a role to play and we need to look at the whole ecosystem and at the end, the drug discovery must be facilitated into affordability and accessibility equity”. 

The ultimate goal is to eliminate HCV by 2030 in Malaysia, Dr. Noor Hisham said. Countries have to look at the big picture, “the macro picture of the ecosystem, come together to build the network, and enhance South-South collaboration’, he maintained, adding  "We have shown that we can (enter into) partnership with government and other agencies, and we can make a big impact on health care.” 

DNDi’s Collaborative R&D model 

Pascale Boulet, representing DNDi, said that it worked on R&D as collaborative partnership that involves pharmaceutical industry, health ministries, treatment providers, patients communities and academia and that it took a ‘public health approach’ to treating hepatitis C. Boulet explained how ravidasvir an oral NS5A inhibitor was discovered and owned by Presidio Pharmaceuticals. It was licensed to Egyptian drug manufacturer Pharco Pharmaceuticals and DNDi for clinical development and commercialization. DnDi collaborated with the Malaysian Ministry of health to conduct clinical trials, leading to its approval for HCV treatment in Malaysia and Egypt in 2021. 

The collaboration is a public-health focused partnership to develop a new chemical entity (NCE), priced as close as possible to a generic for low and middle income countries with high HCV burden, especially those excluded from voluntary licenses. It is a South-South collaboration, non-traditional model of drug development based on non-exclusive licensing with technology transfer. Boulet added that further registrations were planned in South East Asia, Argentina and Latin America.

Boulet highlighted key prerequisites for successful collaborations: common vision that includes community engagement throughout the R&D process; patient-needs driven approach, public leadership, contractual terms that ensure equitable and affordable access and sustainable funding. Boulet added that DNDi is currently working with the Ministry of Health Malaysia, Siriraj Hospital Faculty of Medicine -Mahidol University -Thailand, Oswaldo Cruz Foundation (Fiocruz) -Brazil, Translational Health Science and Technology Institute in India to advance treatment solutions for dengue. 

Impact of South-South cooperation  

In an illuminating discussion on South-South cooperation, Ms. Sangeeta Shashikant from TWN provided the central features of how South-South cooperation evolved since the Buenos Aires Plan of Action (BAPA) for technical cooperation among developing countries in 1978. That plan of action endorsed by developing countries also outlined the basic objectives of South-South cooperation.  

“Now 40 years on,” she said, there was a second high-level conference on South-South cooperation in Buenos Aires in 2019, where developing countries adopted an outcome document. The outcome document urged greater South-South cooperation to achieve sustainable development. It recognized South-South cooperation as “a manifestation of solidarity among peoples and countries of the South that contributes to their national well-being, their national and collective self-reliance and the attainment of internationally agreed development goals, including the Sustainable Development Goals, according to national priorities and plans”, and that “South-South cooperation should not be seen as official development assistance (ODA)”.  

Explaining the major tenets of South-South cooperation, Ms. Shashikant said there are many forms of cooperation among Southern developing countries, covering “economic, social, environmental, financial, and investments" and that it takes place at the bilateral level, and often at regional levels, but in the case of HCV it was an interregional initiative because it included countries like Egypt, she argued. 

In short, this is about developing countries focusing on their development goals, she said, suggesting that there is an office in the UN headquarters in New York that listed south-south initiatives and cooperation, including the positive effects stemming from such initiatives, the TWN expert maintained. 

She offered examples of South-South cooperation during the pandemic such as in vaccine manufacturing by China and Cuba with respect to sharing the vaccine technology. 

According to Ms. Shashikant, South-South cooperation has played “a very pivotal role in the socio-economic development of many developing countries in several sectors” such as in health, agriculture, trade, environment, investment, and finance. And as pandemic and climate change challenges deepens, South-South cooperation offers significant opportunities to harness the potential of development-oriented cooperation among developing countries, she noted.  

In the arena of medical R&D, she said South-South cooperation can play a major role in realizing  the full potential and benefits, she said. To enhance and achieve the major goals through South-South cooperation, Ms Shashikant argued that countries need to have a clear vision and national strategies that promote synergies between South-South cooperation and national development plans. This should be complemented by policies in relevant sectors such as education, health, manufacturing, agriculture, water. 

In the case of Hep C, the vision was the elimination of Hep C by 2030. To achieve that vision, Malaysia utilized TRIPS flexibilities i.e. issued a compulsory license to import affordable HCV treatment, which ultimately led to South-South cooperation that resulted in the development of ravidasvir. This initiative was complemented with policies to decentralize diagnosis and treatment of HCV, thereby increasing the number of patients that are treated. 

Therefore, there must be a vision, which is accompanied with relevant policies as well as political will to use flexibilities, she said, suggesting that once “you have a product in the market you have to ensure the rollout of the product, (and) diagnostics because the end goal is ensuring that the product reached people.” . 

Touching on the medical R&D, she said that one of the most important prerequisite is ensuring the IP laws and policies maximise implementation of TRIPS flexibilities such as having appropriate limitations and exceptions as well as political will to use the flexibilities such as compulsory licensing to achieve the objectives of south-south collaboration in medical R&D, adding that IP has to be managed in a manner that promotes equitable access. 

The TWN expert called on the Southern countries to invest in medical R&D. At present, investment in R&D is extremely low in developing countries, according to WHO’s  Global Observatory on Health Research and Development the gross domestic expenditure on R&D in health in high income is 0.21% of GDP while in low and middle income countries it is significantly lower at 0.01% to 0.02% of GDP. Unsurprisingly, there is an “underinvestment because of the notion that it is an expensive process and that developing a new compound is very expensive”, but in reality actual evidence suggest otherwise. 

Ms. Shashikant said, it was important to identify opportunities where South-South cooperation may meet public interest and development objectives. 

She cited a recent  New York Times article on a “miracle” drug to treat “cystic fibrosis” ( a disorder that damages lungs, digestive tract, and other organs), which costs around  $ 322,000 dollars annually in the US, to drive home the message that how important it is to produce generic versions in developing countries at affordable prices. Apparently, patient groups in South Africa, India, and Brazil are seeking CL for this drug patented by an American drug maker, Vertex Pharmaceuticals.  

Due to the high prices, it is not sustainable for public health systems in developing countries to deliver the costly drug, she said, emphasizing that South-South cooperation can address such challenges. 

She said for e.g. a country like Bangladesh, which is a least-developed nation with manufacturing capacity and which does not have to adhere to pharmaceutical product patent rules of the WTO, could easily manufacture this drug while developing countries in need can agree to jointly procure from such manufacturers and perhaps also invest in the development and production of the generic version. It is estimated the medicine can be manufactured for about $5700 per year.

Finally she stressed on the need to create enabling policy environment at the international level that allows greater collaboration among developing countries to address challenges especially during crises and emergencies.